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As an entrepreneur, there are times when it can help to talk to someone about what you want for your company and the challenges you are facing. If you are the manager of a small business, this will often mean finding someone outside your company. But who? There are many options and picking the wrong one can sometimes do more harm than good. In this article, I explain the roles of two popular options – small business advisors and small business coaches – to help you make the right choice.
Here are some quick links to the sections detailed below:
A business advisor and a business coach are not the same thing
In a nutshell, advising is more about the commercial side of business and coaching is more about the personal side. The first is about making sure you have the right business plan. The second is about giving you the personal tools to execute it. It’s vital to understand the distinction.
Yet the two terms are often incorrectly used interchangeably. This can make it hard for company directors and owners to distinguish between the two. To make things more confusing, advisors and coaches mix the terms up as well. There are small business coaches who are clearly offering advice. And some self-described small business advisors are really offering coaching. To cap it off, some professionals offer services that are similar to advising or coaching but operate under titles such as small business mentor or small business consultant.
Making the wrong choice can be costly — here’s how to choose the right option
Having a good advisor or coach can be a big help but choosing the wrong person can be a waste of time and money. To get it right, you need to correctly diagnose what is holding your back from reaching your goals.
In this article, I will:
Explain what business coaching is and the pros and cons of hiring a small business coach.
Explain what business advising is and the pros and cons of hiring a small business advisor.
Explain what is meant by small business mentoring and small business consulting.
The bottom line: both advisors and coaches can both transform the prospects for your business – but you need to know what sort of support you need first.
As a bonus, there’s a FREE and EASY list of 20 questions at the end of this article. If you think outside guidance may be for you, try asking yourself the 20 questions. Your answers should tell you whether an advisor or a coach is the right option – it could even be both.
So if you’re a company owner or director and you want to find someone to discuss your business or your role with, here are the options.
What is business advising?
Small business advisors are usually self-employed but may use networks that provide client rankings. If they do work for an advisory firm, these are usually boutiques with just a few staff.
They tend to a background in commerce (for example, retired senior executives) or in a profession (accountancy, finance, management consulting and so on).
Advisors tend to focus on the strategic and commercial aspects of running a business, rather than the personal traits that business leaders should have to achieve success.
What you should expect from an advisor is help to improve your operational and financial performance. They will work with you on setting clear business goals and selecting the right strategy, marketing techniques and financial disciplines to reach those targets.
I’ve looked at how some prominent UK business advisors describe their services (based on the top five organic and paid-for Google search results for ‘UK small business advisor’). Their websites give an idea of what they offer potential clients.
UK Business Advisor | |
|---|---|
Growthidea | Our business consulting services offer small companies the tools and corporate strategy they need to meet their business development goals, creating a successful business growth strategy for any small business owner looking for growth. |
We Grow Businesses | We help small businesses to grow. We analyse, advise and help small business owners to implement improvements. Our service delivers three results – more revenue, more profit and more cash. |
Julie Chanteray | Being a business advisor is all about helping you to get the right strategy to build a successful company and supporting you to put that strategy into action. I often say that I help small business owners to make more money and have more fun while they’re doing it. |
What are the pros and cons of using a small business advisor?
Starting with the pros:
Fresh perspective
Running a company can be like living in the same house for a long time – you stop noticing the problems because they become familiar. You adapt to the deficiencies instead of creating ways to fix them.
Simply discussing your ambitions with an experienced and thoughtful outsider – who will look at your company with a fresh pair of eyes – can help you see your business in a new light. A good advisor should ask the right questions – ones that prompt you to think of ways to run your business more successfully. This should open the door to better performance.
Breadth of experience
Small business advisors work with clients across many different industries. And they see how lots of different companies perform – some better than others. These insights can be very helpful.
The top-performing companies can provide great examples of best practice that under-performing companies can use (provided that sharing the insights doesn’t breach client confidentiality or create a conflict of interest).
Similarly, struggling clients can provide great examples of turnaround stories. Businesses with similar problems can learn from these. Struggling clients can also generate a good list of things to avoid.
While coaches also see a wide range of client situations, the range of issues tackled by advisors is likely to be much broader.
Professional qualifications common
The typical profile of a small business advisor suggests that they are more likely than a coach to have a relevant professional qualification. Some clients may not care about this, but some might.
No recurring commitment
Business advisors don’t usually expect their clients to commit to recurring payments for regular advice sessions. Their terms mostly depend on the specifics of the project. Often it’s a one-off. At other times, clients may want a regular sounding board. In any case, it’s up to the client to decide.
Less reliant on personalities
You’ll obviously want to work with someone you trust, like and respect, but personal chemistry is usually more relevant if you work with a coach. It’s important to get along with a business advisor, but you can be more detached with them because their results have less to do with you as a person.
Now on to the cons of using a small business advisor:
Doesn’t address your capabilities
If what’s holding you back is not your business idea or your strategy, but rather gaps in the expertise you need to execute your plan, hiring a business advisor is probably not the right move. While it’s a good start, having a great business idea and a smart strategy is not enough to create a successful business.
Entrepreneurs also need the personal attributes and know-how to convert business potential into reality. Just because these capabilities are ‘soft’ skills does not make them any less crucial.
For example, you may be easily distracted and lose sight of your most critical objectives. Or you may struggle to motivate your staff with your vision for the company. In this case, optimising your product performance or your marketing strategy may not be the answer to your problems.
This is why it’s so important to first properly diagnose what is holding your business back before looking at a solution.
May overlook human factors
Your business advisor needs the right level of emotional intelligence so that they can tailor their recommendations to your circumstances, aspirations and values. Every situation is unique precisely because it combines a commercial challenge with human factors. This will always set bounds around the range of workable solutions.
For example, it would be pointless for an advisor to recommend a strategy to a CEO that would be optimal in theory, but would upset some of the top management team and have no chance of winning their support. It would equally be pointless to recommend a high risk, high return strategy to a very risk-averse CEO.
Some business advisors with a background in accounting and finance may be too driven by numbers and theory. This may leave them insufficiently attuned to the human aspects of running a business successfully.
For this reason, finding the right advisor might involve trying out more than one in order to find the right fit.
Beware template advice
We’ve all seen sales pitches that offer a one-size-fits-all solution – ‘Follow my 5-Step Plan for Guaranteed Success!’
There is definitely a place for process. But a good business advisor knows that every client has unique needs. Selling a template and calling it a solution is usually a way to make money rather than help a client.
Providing commercial advice is more complex and multi-faceted than providing coaching. Someone offering business advice must take account of the multiple dimensions of your industry’s conditions and trends, how your company is positioned, your strategy options, any execution issues, your financial capacity as well as the human elements that come into the mix.
Bearing this in mind, advisors selling templates are more dangerous for clients than coaches that do the same thing.
Beware franchised advisors
As a company director or owner, you should be especially wary of business advisors that operate as part of a franchised network. Advisors use networks to gain skills training, templates for how to advise, a brand to market themselves under and client leads to follow up.
It’s likely that you’ll be better off taking advice from an experienced professional – someone with a lifetime of real-world experience who can think on their feet. If you engage someone who is advising you from a script, you could fall far short of your goals.
It’s also worth bearing in mind that a franchisee advisor may have spent a lot of money to buy their franchise and may have an urgent need for clients to pay for it. They may also be incentivised by the terms of their agreement with their franchisor to win your business, regardless of whether they have the right experience to service your needs.
As a director or owner, you should only want to work with a business advisor who is genuinely convinced that they can deliver the advice and support that you need.
Franchise-based organisations would argue that they are providing a consistent formula for success that they have road-tested on many previous client engagements. But if you believe that every client engagement is unique, this may not be a persuasive argument.
What is business coaching?
Small business coaches (also known as SME coaches) are typically solo operators – they don’t work for larger firms. Some – like advisors – market themselves through networks but they still work for themselves.
Some business coaches have commercial backgrounds (for example, retired senior executives). Others have experience in ‘softer’ skill areas, such as marketing & communications or HR.
Each business coach has their own style and will bring different talents to bear. The key point is that coaching usually focuses on the personal component of business leadership. They help business owners and directors by boosting confidence, improving interpersonal skills, teaching successful business routines and so on. They can also help you clarify your personal goals and priorities.
It’s worth noting that some coaches describe themselves as ‘business and executive coaches’. So as well as small business owners, they also advise executives in larger organisations on how to build their career and climb the corporate ladder. Some even describe themselves as ‘life coaches’, which clearly suggests that their services extend beyond work.
So that you can compare with advisors, we have collected the top five organic and paid-for Google search results for ‘UK small business coach’. Here are some examples of how they pitch to potential clients.
UK Business Coach | |
|---|---|
Debbie doodah | I'm here to support you to create a business you love. I’ll work alongside you to create a business model that works for you, selling services you love to clients you love working with. Life is too short to feel stuck, frustrated & overwhelmed. |
Angelina Bell | As a professional business coach with frontline business experience I focus on your personal and business challenges with a ‘One Page’, action-orientated, business plan and I make all my clients accountable for implementing actions so that things get done. This type of results based business growth coaching pivots around appropriate target setting, effective review and performance analysis and increased productivity. |
Jake Smolarek | Increase Revenue, Restore Work-Life Balance, Get More Done In Less Time, and Fall In Love With The Work You Do All Over Again - Business Coaching In a Nutshell |
What are the pros and cons of using a small business coach?
Starting again with the pros:
Builds personal capabilities
If there’s a more personal component to what’s holding you back from achieving your goals, then a coach could be just what you need.
Let’s say you have a great business concept, sales and client testimonials are going well and you have the right strategy to scale up, but you are simply struggling to execute your plans. In this case, a coach could really help you. Confidence, self-discipline and a talent for organisation, people management, communication and negotiation can be vital if your business is to succeed.
Not all business leaders have these soft skills and this could be why many good business ideas fail to get off the ground.
Coaches can be inspiring
Good coaches can be very charismatic and inspiring.
For some entrepreneurs, personal growth can transform their ability to manage a small business successfully. Working with the right coach can give you insight into the areas you need to work on and where you can make the most of what you already have.
May include networking
Some business coaches will connect you with their network of clients. This can be great for sharing experiences with other entrepreneurs. Just knowing that you are not the only entrepreneur who can’t find enough of the right staff or struggles to balance the demands of work and personal life can be a big morale booster.
Peter Drucker, one of the world’s foremost thinkers on management, emphasised the point that effective management is not an aptitude that some are born with, it is a set of skills that can be learned. As he put it in “The Effective Executive” [i]:
“To be effective is the job of the executive…The executive is, first of all, expected to get the right things done. And this is simply saying that he is expected to be effective… Intelligence, imagination, and knowledge are essential resources, but only effectiveness converts them into results…
The effective executives I have seen differ widely in their temperaments and their abilities, in what they do and how they do it, in their personalities, their knowledge, their interests… All they have in common is the ability to get the right things done…
Effectiveness, in other words, is a habit, that is a complex of practices. And practices can always be learned.”
And here are the cons:
Doesn’t address business model
If you haven’t yet diagnosed what is holding you back then hiring a business coach could be a mistake.
If your business idea is simply based on a weak proposition that is never going to resonate with customers, or your strategy to develop your business idea is fundamentally flawed, then no amount of improvement in your soft skills is going to solve your problems.
In fact, if you pursue a bad business idea or a flawed strategy with increased confidence and enthusiasm, you’ll just lose money.
Here’s a question to ask yourself: are you facing a bottleneck that results from weak business fundamentals, or do you still need to develop the talent and know-how to execute a plan that is otherwise sound? You’d do well to get the diagnosis right.
It’s very personal
Not everyone is suited to the more personal nature of coaching (as opposed to advising).
Some owners or directors are simply not comfortable examining their weak points with a stranger. And if not handled well, this could do more harm than good.
If your company is ticking along fine, you might be better off accepting a score of 8/10 on the scale of commercial success rather than trying to reach 10/10. There is no iron law that says maximum profits should be the exclusive goal of every business owner.
Character match is vital
Because coaching is personal, finding the right character match is crucial. That could take a lot of time and effort.
The right business coach will have enough commercial awareness to understand the business context you are operating in and they’ll have the right temperament to empathise with your goals and constraints.
A good fit may not mean someone who has a similar personality to you. Instead you may need someone who complements you. For example, if you have a more laid-back personality, you might want to hire a coach with a higher energy level – to bump you out of your comfort zone. If you have an impulsive nature, you might want to partner with someone who is calm and will rein you in before you rush a big decision.
Finding the right fit may not be easy and you might need to try more than one business coach before you find a relationship that works for you.
Obligatory long-term commitment
Business coaches often want their clients to commit to a long-term relationship with recurring payments for regular sessions. If you simply need help to tackle a single issue, a coach is unlikely to be the right person for you.
For example, you might just want advice on how to effectively segment your customer base so you can target your marketing more efficiently. Perhaps you feel confident you could then execute the plan yourself. If so, a business coach may not be the right solution.
Beware template advice
As I mentioned earlier, some professional advisors, including small business coaches, sell template solutions rather than a bespoke service.
There is a place for process. But a good coach needs to adapt how they work to suit the unique needs of each client.
Some business coaches are duds
Anyone can set up as a small business coach. The entry barrier into the industry is low – creating a website doesn’t cost much and a coach does not need any form of professional qualification to market themselves as such. So it’s best to check what you are paying for before you put your money down.
Of course, the same can be said of business advisors (although more have professional accounting or finance qualifications). The difference is that the coaching role may attract people who have lots of self-confidence but don’t always create value for their clients.
There’s one criticism that hovers over the business coaching profession. They behave either like therapists (they respond to every question from their clients with a question of their own). Or they act like bad gym trainers (they set targets and then criticise their clients for not reaching them). This is unfair on the many good coaches out there, but it’s good to guard against this type of coach.
Should you consider a small business mentor or a small business consultant?
The services offered under these categories are not always clear. Here are some common ones:
Small business mentor. The clear implication of a ‘mentor’ is that they offer experience. Business mentors are mostly semi-retired senior executives. They market themselves for their all-round commercial acumen rather than any specific technical expertise.
Small business consultant. A consultant is normally someone who works on long client engagements (weeks or months at a time, rather than the hours or days that advisors or coaches might be committed to). The word ‘consultant’ is more commonly used in management consulting or IT consulting. In the small business space, the specifics of the role are unclear.
Unless you know exactly what mentors or consultants are offering, a better match may be an advisor or a coach.
Conclusion: Advisors and coaches can both transform the prospects of your business – but you must be clear about what sort of support you need
Despite their differences, good business advisors and good business coaches have a number of things in common:
In the end, both are pursuing the same objective – supporting you as you search for ways to manage your small business successfully.
Both bring an outside perspective. Talking to someone who can prompt you to examine the opportunities and challenges that you and your business face with a fresh perspective can be incredibly valuable.
Coaches and advisors both need to balance the benefits of being an outsider with the need to build a solid understanding of what makes you and your business tick. If they can’t, they are simply not going to be able to offer counsel that is relevant and helpful to what you are trying to achieve.
They must also balance their emotional detachment with empathy and support. If you’re looking for outside help, you have recognised a need for change. At that point, you need to speak to someone who will put themselves in your shoes and try their hardest to help you. If you are trying to overcome personal weak points, they should empathise and not judge. If you are facing difficult industry conditions, they should work through these with you and not simply collect a cheque while privately writing off your prospects. Whether it’s an advisor or a coach, they need to delicately provide support but open up new space for self-awareness and even self-criticism.
As they work with you, a business coach will focus on the human angle, but must not ignore the possibility that a client’s problem lies in the fundamentals of the business. A business advisor will focus more on the strategic and commercial issues but should not be blind to the human components that are vital to business performance.
Both must consider whether they are in fact the right person to provide you with counsel. They need to be honest if they think you would be better off with help from elsewhere.
So there’s not a neat dividing line between a good advisor and a good coach. Instead, there’s a grey area where the two can overlap. This is summed up neatly in a great book – ‘The Trusted Advisor’ (Maister, Green & Galford, 2002) [ii]. The authors map out the progression from being a functional expert in a specific field to becoming the go-to person that clients call for support on a much wider range of issues. The authors write:
“Issues at this level [ ie, the level of being a trusted advisor ] are no longer seen merely as organisational problems, but also involve a personal dimension. Becoming a trusted advisor at the pinnacle level requires an integration of content expertise with organizational and interpersonal skills.”
Because of this grey area of overlap, advisors and coaches often use the terms interchangeably. Some advisors offer what is more akin to coaching, while some self-described coaches look more like advisors. This is especially true for small business coaches, who may think ‘coach’ sounds more approachable than ‘advisor’ and be more appealing to small and micro-enterprise entrepreneurs.
So the choice between a business advisor and a business coach is a case of horses for courses. Either can have a transformative effect on the fortunes of a small company. If you’re looking to manage a small business successfully, hiring an advisor or a coach is likely to be a smart decision at some point in your journey. Just bear in mind that making the wrong choice can be a bad mistake. So examine your own needs very carefully. Listen to what any advisor or coach is promising to help you with, and the topics on which they are silent.
Of course, it’s always possible that you could benefit from taking on both an advisor and a coach. Each caters to very different needs and they are not mutually exclusive.
Take our 20 question test: Do you need a business advisor or a business coach?
If you’ve decided you could benefit from outside guidance but you’re still not sure if you need an advisor or a coach, try asking yourself the 20 questions below. Here's how it works:
Table 1 evaluates whether you might benefit from hiring an advisor and Table 2 evaluates whether you might benefit from hiring a coach.
Compare the statements on the left and on the right. Decide which one most closely reflects how you evaluate yourself and your business.
If you mainly associate with the statements in the left-hand column, it suggests you may potentially benefit from hiring a coach/ advisor. If you mainly associate with the statements in the right-hand column, then you may be well set already and not in need of any outside support.
TABLE 1 — Business Advisor Test
1 | I can explain the value that my products or services bring to my customers in a single sentence. | Customers buy my products or services because the quality is high and my prices are very reasonable. | |
2 | I can explain, in two sentences, how I get my product or service in front of my target customers through the most effective channels, at the right cost. | My company sells by using the latest digital marketing techniques. I outsource the work to expert freelancers or agencies who have a spending budget. If our sales are good and the company is profitable, then it should be obvious that our marketing is working. | |
3 | When I try to sell to customers, I always end up offering price discounts. It means my margins are too low but I can never find the right way to argue back. | The product/ service I sell is fairly standard, but I have built up a lot of features around the way I deliver it that my customers really value. I get a lot of repeat business and my customers don’t often ask for discounts. | |
4 | I have goals that I think my company can reach over the next 2-3 years and I can explain the strategies that I have put in place to achieve them. | I set an annual budget every year, but there are too many uncertainties to plan 2-3 years into the future. | |
5 | I know what the bottlenecks are to growing my revenues and I have clear, logical plans for breaking through them. | To generate more sales, I and my staff need to work harder. I set targets to motivate my staff to get better results. | |
6 | I keep a regular eye on what my competitors are doing. I adapt any promising ideas that I see to my own business so that I don’t miss any tricks or get left behind. | I am too busy with growing my own company to study what my competitors are doing. If I run my own business the right way, I won’t need to worry about them anyway. | |
7 | My company monitors customer churn and repeat buying closely. When we lose a customer, we find out why and take remedial action. | You always lose customers from time to time, that’s business. The key thing is to keep winning plenty of new ones. | |
8 | I capture and analyse a lot of the data that my company generates. I use the data to refine how we work, the products/ services we offer and how we market them. | I simply don’t have time to gather lots of data. We focus our efforts on marketing, which is a far more profitable way to spend our time. | |
9 | I have a financial reporting dashboard that gives me a timely and clear overview of my key financial ratios. | My accounting firm prepares our financial reports for us. Apart from that, I keep a close eye on our cash levels to make sure we have enough on hand to finance our operations. | |
10 | Top management all commit to rolling KPI targets and business development initiatives, which are linked to our 2-3 year goals. | I hold regular management meetings, where anyone can raise any issues that they want to. We review how sales and profits have done each month and at the end of the year. | |
TABLE 2 — Business Coach Test
1 | I sometimes feel that I’m not up to the job. I see other people who seem better qualified as entrepreneurs than I am. | Some entrepreneurs are outwardly more successful than me, but we all face similar challenges, and they are just more visible than I am. |
2 | I can't face going to work some mornings because of the huge pile of items in my to do list. | I feel up for going to work each day – I have a lot on my plate, but I’m determined to drive my company forward. |
3 | I struggle to prioritise how I should spend my time. I feel swamped. | I have a system for focusing my effort on the issues that really matter to drive the company forward. I never get to the end of my to do list but I usually tick off the critical issues. |
4 | I’m prone to distractions. Sometimes I get to the end of the day and I can’t see what I have achieved. | I have systems and schedules in place to help me stay focused. When I’m working, I get things done. |
5 | I feel enthusiastic about the future of my business, but I can’t get my staff to understand my vision and buy into it. I feel that some of them are just collecting a pay cheque. | Each of my staff understands how their work contributes to the success of the company. They are happier and more productive at work as a result. |
6 | I am a considerate boss, which means that I often put the needs of my staff in front of my own. I find it hard to say ‘no’. | I have the right to prioritise my own needs and preferences over those of other people. I may help other people out when I can but we all need to stand on our own two feet. |
7 | It matters to me what my staff think of me. I find it hard to take decisions if I think they will be unpopular among my team. | I have the right to judge my own decisions and take responsibility for them. Other people may disagree with me but I don’t have to justify myself to them. |
8 | When I negotiate with customers, I don’t want to upset them or lose them. I feel that a few of them get more than they should as a result. | I sometimes disagree with my customers about terms but everyone has the right to negotiate what is best for them. That’s not selfish, it’s business. |
9 | Some of my staff tend to push work up to me instead of me delegating to them. But it’s easier and quicker for me to do many things myself. | I have a formal system for selecting which tasks are delegable and to whom. Delegation costs time in the short run but it saves time in the long run. |
10 | I’m not a naturally outgoing person and I hate selling. It means being pushy and taking up people’s time. | When I sell my products or services, I am helping my customers by bringing them something that will be valuable for their company. |
[i] Drucker, P. F. (1999) The Effective Executive. Oxford, Butterworth-Heinemann. This classic book can be bought at all good book stores. For more about Peter Drucker’s ideas and work, see https://www.drucker.institute/ . [ii] Maister, D.H., Green, C.H., Galford, R.M. (2002) The Trusted Advisor. London, Simon & Schuster UK Ltd. This is also a classic book that can be bought at all good book shops. Co-author Charles H. Green founded his firm Trusted Advisor Associates with the goal equipping companies and individuals with the knowledge and skills to foster trust – see https://trustedadvisor.com/ .